Specific Relief Act, 1963

Indian Penal Code, 1860

Summary Trail 

• Section 143 gave to the court the power to try cases summarily; 
• Section 144 provided for the mode of service of summons; 
• Section 146 provided that the bank's slip would be prima facie evidence of certain facts. 
• Section 147 made the offences under the Act compoundable.

Under Section. 138 of N.I.Act 

Accused found NOT guilty                                                 Accused found guilty 

Acquittal U/sec. 255(1) Cr.P.C.                                conviction U/sec. 255(2) Cr.P.C.

Sentence

The sentence prescribed under Section 138 is up to two years or with fine which may extend to twice the amount or with both. What needs to be noted is the fact that power under Section 357(3) CrPC to direct payment of compensation is in addition to the said prescribed sentence, if sentence of fine is not imposed. The direction to pay compensation can be enforced by default sentence under Section 64 IPC  and by recovery procedure prescribed under Section 431 CrPC, Meters and Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560.

 Compounding of offence 

Section 147 makes offence punishable under the provisions of NI Act compoundable.

If the original complainant comes to the Court and says that he is withdrawing himself from prosecution on account of compromise and he has compounded the matter, then the conviction and sentence have to be set aside. 

No formal permission to compound the offence is required, 

Rameshbhai Sombhai Patel v. Dineshbhai Achalanand Rathi, 2004 SCC OnLine Guj 469.

Though compounding requires consent of both parties, even in absence of such consent, the court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused, 

Meters and Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560.

Quashing of complaint by the High Court under S. 482 CrPC 

[inherent powers] 

If an accused wants the process under Sections 138 and 141 to be quashed by filing a petition under Section 482 CrPC , he must make out a case that making him stand the trial would be an abuse of process of court, Gunmala Sales (P) Ltd. v. Anu Mehta, (2015) 1 SCC 103.

Different reasons for a cheque to get bounced:

1. When the signatures on the cheque and the signatures on the official documents of the bank account like passbook etc. do not match.


2. Where there is clear overwriting on the cheque


3. When the cheque is presented after the expiry of 3 months (validity of a cheque), i.e. after the cheque has expired.


4. In case the bank account has been closed by the account holder or by the bank itself.


5. When there are insufficient funds in the bank account of the drawer.


6. In case payment has been stopped by the account holder i.e. the drawer.


7. When the opening balance in the bank account is insufficient.


8. When there is clear inconsistency in the figures and the words presented on the cheque.


9. When there is no seal/ stamp of the company that has issued the cheque.


10. When there is inconsistency in the account number in the cheque.


11. When the cheque has been issued from a joint account where signatures of both the account holders are required but the cheque only bears one sign.


12. In case the drawer or the drawee has died.


13. When the drawer has turned insolvent.


14. When the drawer has turned insane.


15. In case of a crossed cheque (a crossed cheque is when the drawer specifies a general instruction to the bank in relation to the cheque).


16. In case the cheque has been issued against the rules of trust.


17. In case there have been alterations in the cheque.


18. In case the bank has doubt in the authenticity of the cheque.


19. In case the drawee presents the cheque at the wrong branch of the bank.


20. In case the mentioned cheque amount crosses the limit of the cheque overdraft (it is the maximum limit that a bank allows its consumers to withdraw).

1881, Negotiable Instruments Act, Section 138(b) Statutory Notice., 

138(b): “A notice in writing should be given 
-- to the drawer of the cheque
-- within 30 days --
on receipt of information by the payee or holder in due course, as the case may be,---------from the bank regarding the return of cheque as unpaid”.

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Case-8 -  

Complainant-P.W.1, after Ex.P2 cheque was returned with endorsement 'funds insufficient' under Ex.P3 cheque return memo dated 8.1.2015, he got issued legal notice dated 12.1.2015 under Ex.P4 to the accused calling upon him to pay the cheque amount within 15 days from the date of receipt of said notice.

Complainant sent the said legal notice to the residential address of accused and also to the accused through Superintendent, District Jail as the accused was in Judicial Custody by then.

The notice sent to the residential address was returned unserved under Ex.P6 with an endorsement that the “accused continuously absent for 7 days”.

The notice sent to the accused through Superintendent, District Jail was returned as the “accused refused to receive the same”.

           During cross-examination, P.W.1 was suggested that the accused after releasing from District Jail, approached him, asked about the issuance of legal notice and he told that he would pacify the matter amicably. The self suggestion given to P.W.1 that the accused is aware about the issuance of legal notice and also about the contents of legal notice sent to him, while he was in judicial custody, though he refused to receive the same. Otherwise, he would not have approached P.W.1 to ask about the issuance of legal notice. Moreover, as per the provision under Sec.27 of General Clauses Act, refusal to receive the notice by the accused is nothing but service of notice on the accused. 

              Hence, this court is of opinion that the complainant got issued statutory legal notice to the accused within the stipulated time about dishonour of cheque as required under Sec.138(b) of N.I Act and the same was served on accused.

                                                                         ----****----

Dishonour of Cheque - Complaint - Amendment of complaint allowed

RAJASTHAN HIGH COURT

(Jaipur Bench)

Before:- Mr. Pankaj Bhandari, J.

S.B. Criminal Miscellaneous (Petition) No. 244 of 2018. D/d. 03.05.2019.

M/s Mahi International Through Proprietor Shri Ashwani Khandelwal S/o Shri Ghanshyam Khandelwal - Petitioner

Versus

State Of Rajasthan Through P.p. and another - Respondents

For the Petitioner :- Mr. M.P. Singh, Advocate.

For the Complainant :- Mr. Sudhir Jain, Advocate.

For the State :- Mr. Arvind Bhadhu, PP

IMPORTANT

Dishonour of Cheque - Complaint under section 138 NI Act - Amendment of complaint allowed

A. Negotiable Instruments Act, 1881 Section 138 Dishonour of Cheque - Amendment of Complaint - Amendment sought to change of Bank name from UCO Bank, Branch Johari Bazar to SBBJ Bank, Branch Chaura Rasta, Jaipur - Amendment of typographical errors in the dates mentioned in the complaint - Cheque, return memo available on record the bank details and the date of dishonour can be ascertained - Held that the Court below has not committed any illegality in allowing the amendment.

[Para 10]

B. Negotiable Instruments Act, 1881 Section 138 Dishonour of Cheque - Exemption sought from personal appearance - Allowed, subject to petitioner giving an undertaking before the Court below that he would not dispute his identity as the particular accused in the case and that a counsel on his behalf would be present in Court and he would have no objection in taking evidence in his absence - Petitioner should further undertake that he would appear in the Court as and when Court requires his presence.

Case-7 - 

Negotiable Instruments Act, 1881, Section 138(b) Statutory Notice., 

The Complainant (PW.1) got issued a legal notice to the accused on the 5th day after receiving information (Return Memo), from the bank about dishonor of Ex.P1 cheque, through registered post with acknowledgement due. The said legal notice was returned unserved under Ex.P4 returned registered cover. 

P.W.1 deposed that the accused managed the postal authority and got return the said notice stating that the “addressee continuously absent” and the accused failed to comply with the demand. The learned counsel for the accused contended that the statutory legal notice was not served on the accused and as such, the present complaint is not maintainable.

                As per the provision u/Sec.27 of General Clauses Act in case, the registered legal notice sent to the addressee with correct address and it is returned 'continuously absent or intimated or unclaimed', the said notice is said to have been served on the addressee. The said proposition of law is settled by Apex Court and all other Hon’ble High Courts in umpteen number of cases. It is not the case of the accused that address mentioned on the cover is a wrong address and he is residing in another address. The accused did not produce any cogent evidence or any document like Aadhar card, voter ID card, Ration card etc, to show that he is residing in the address other than the address mentioned on the registered cover.

                Moreover, the Court perused the address mentioned on the acknowledgment showing the receipt of summons sent by the Court after assigning C.C. The address mentioned on the said acknowledgement and also the address mentioned on the registered legal notice cover Ex.P4 are one and the same. Hence, the Court is of the opinion that the complainant got issued legal notice to the correct address of accused and as it was returned unserved with postal endorsement that “continuously absent for 7 days”, it is deemed that registered legal notice is served on the accused as required u/Sec.138(b) of N.I. Act..

                                                               -------*****-------

Case-6 - 

Negotiable Instruments Act, 1881, Section 138(b) Statutory Notice., 

       P.W.1 (Complainant), deposed that after receiving cheque return memo along with cheque, he got issued Ex.P3 legal notice to the accused - 20 days after receipt of information from the bank about the dishonour of Ex.P1 cheque, through registered post with acknowledgement due (RPAD).

P.W.1 further deposed that the said cheque was unserved with an endorsement “on 1.9.2--- intimated, deposited 6 days and on 8.9.2--- not claimed”.

During the cross-examination:

P.W.1 admitted that the accused did not receive legal notice Ex.P3.

P.W.1 denied that purposefully notice under Ex.P3 was sent to the wrong address of the accused. After assigning C.C. summons are issued to the accused to the address mentioned in complaint as well as the same address mentioned on the cover containing legal notice Ex.P3. Again the said summons was returned with an endorsement “intimation and not claimed” and the court issued Non-bailable Warrant against the accused.

        On that, the accused filed petition under Section 70(2) of Cr.P.C by mentioning his address. The address mentioned on the cover containing legal notice under Ex.P3, the address mentioned in the complaint and the address of accused mentioned in his petition under Section 70(2) Cr.P.C are one and the same. There is no difference of address from the address mentioned on registered cover containing Ex.P3 legal notice and the address mentioned in 70(2) petition filed by the accused.

**  Hence, the contention of the accused that purposefully the complainant mentioned wrong address on the registered cover containing Ex.P3 legal notice, is not trustworthy.

As per the Section 27 of General clauses Act when the address of the addressee mentioned on the cover correctly, it is deemed service, though it was returned as refused and also not claimed.

 On this aspect, the court also came across a decision reported in AIR 2008 (NOC) 2287 Madras.

          Hence, this Court is of opinion that the complainant got issued statutory legal notice to the accused within the stipulated time and sent the same to the correct address of the accused stating the dishonour of cheque, as required under Section 138(b) of N.I Act and the same is deemed service on the accused as it was not claimed by the accused, though intimated as per the postal endorsement.

                                                                         ----*****----

Case-5:
Negotiable Instruments Act,1881, Section 138(b) Statutory Notice., 

The complainant got issued a statutory notice dt.08.04.2--- (Ex.P3) to the accused calling upon her to pay the amounts due under the bounced cheque within 15 days from the date of receipt of the statutory notice and the said statutory notice dispatched to the accused by registered post with acknowledgement due and the same was returned unserved with a postal endorsement 'no such addressee'.

Again the complainant dispatched another copy of legal notice to the accused    on 24.04.2--- on her correct address and the same was received by the accused. On receipt of the said statutory notice, the accused issued a reply dt.09.05.2---(Ex.P5) to the complainant.

Therefore,  it  can  be  concluded  that  the  complainant  issued  a constructive notice to the accused as required U/s.138 (b) of the Negotiable Instruments Act.

Case-4  -
Negotiable Instruments Act,1881, Section 138(b) Statutory Notice., 

        The complainant got issued a statutory notice Ex.P9 to the accused calling upon him to pay the amounts due under the bounced cheque within 15 days from the date of receipt of the statutory notice and the same was dispatched to the  accused by registered post with acknowledgment due and also under  certificate of posting and the notice sent by registered post was returned  with  a  postal  endorsement  “unclaimed”.

Ex.P12  is  the unserved postal cover.

There is no dispute from the side of the accused in respect of his address on Ex.P9 statutory notice and on Ex.P12 unserved postal cover.

The complainant-society claimed that the accused had received statutory notice under certificate of posting.

There is no dispute from the side of the accused with regard to receipt of statutory notice from the complainant-society. 

Moreover, the accused in his statement recorded under Section 251 Cr.P.C examination and under Section 313 of Cr.P.C categorically stated that he received statutory notice from the complainant-society.

Therefore, it can be concluded that the complainant-society issued a constructive notice to the accused as required under Section 138 (b) of the Negotiable Instruments Act.

Case-3 -  
Negotiable Instruments Act,1881, Section 138(b) Statutory Notice., 

The complainant got issued a statutory notice (Ex.P6) to the accused calling upon him to pay the amounts due under the bounced cheque within 15 days from the date of receipt of the statutory notice and the same was sent by RPAD & UCP. 

** The notice sent by registered post was returned unserved with a postal endorsement 'unclaimed', while, the notice sent under certificate of posting was not returned and it is deemed to have been served on the accused.

The learned counsel for the accused has vehemently contended that no statutory notice was received by the accused from the complainant and therefore, the complainant failed to comply the mandatory provision as required U/s.138 (b) of  NI Act to issue prior notice to the accused, which is condition precedent and thereby, the complainant denied the opportunity to the accused to pay the amount covered by the cheque within the stipulated period provided by the act and therefore, the accused cannot be prosecuted for the offence punishable U/s.138 of the Negotiable Instruments Act. 

The counsel for the accused further contended that the notice sent under certificate of posting cannot be deemed service of the notice as such service is not recognized by the General Clauses Act.

In support of the said contentions, the learned counsel for the accused has relied upon the following decisions:

i) The decision of Hon'ble Supreme Court rendered in

State of Maharashtra Vs.Rashid Babu Bhai Mulani reported in

 

2006 AIR SCW 162, wherein it was observed that--

“The department of posts may have to evolve some procedure where by a record in regard to the issuance of certificates is regularly maintained showing a serial number, date, sender's name and addressee's name to avoid mis-use. In the absence of such record, a certificate of posting may be of a very little assistance, where the dispatch of such communications is disputed or denied.”

ii) The decision of our Hon'ble High Court rendered in

Yadlapalli Satyam Vs.K.Seetharamanjaneyulu and another

reported in 2005 (1) ALD (Crl.) 473 (AP), wherein it was held

that--

“The complainant did not adduce any evidence to show that accused was present at address and he managed to get endorsement from postal authorities that he was absent for 7 days. On the other hand, the accused examined VAO to show that he was absent during that period.

Purpose of statutory notice to give opportunity to the accused to pay the amount covered by cheque. Unless there is a proof that there was service of notice or that endorsement was managed by the accused, it cannot be said that there was valid service of notice”.

            iii)  In another decision rendered by our Hon'ble High Court in 

A.Sudershan V.Mannan (Shabir) and another 

reported in 1997 (1) ALD (Crl.) 795 (AP) 

wherein it was held that--

“Registered notice sent to the accused was returned with a postal endorsement “Party continuously absent for seven days” - does not amount to service under the Negotiable Instruments Act. It cannot be treated as constructive notice”.

On the other hand, the learned counsel for the complainant has argued that the complainant dispatched Ex.P6 statutory notice to the accused on his correct address by registered post with acknowledgement due and also under certificate posting and the accused received the statutory notice under certificate of posting and the notice sent by registered post was returned unserved with a postal endorsement 'unclaimed' and therefore, the said notice is deemed to have been served on the accused in view of the presumption U/s.27 of the General Clauses Act.

      A perusal of cause title of Ex.D1 order, it does not contain the name of the father of the accused, even the age of the accused and those columns mentioned as “son of not known”, “aged major” like that and in those circumstances, it cannot be said that the address of the accused mentioned in Ex.D1 order is the correct address of the accused. 

It is already stated supra that the accused did not take steps to file the documentary proof to show his correct residential address in the relevant period of December, like house hold supply card, election identity card, residential certificate, employee identy card, or any other proof of residence issued by the competent authority. It is not out of place to mention here that the accused opened his account with .... Bank Ltd.,.... branch, and the said Bank Manager by name ...... was examined as PW3 and he brought the statement of the account of the accused maintained by ...Bank Ltd., .... branch and the same was marked as Ex.P10, wherein the address of the accused was mentioned and the said address is similar to the address mentioned in Ex.P6 statutory notice. 

          Even though, the accused disputed his address on Ex.P6 statutory notice, but the same address only was furnished by the accused in his personal bond executed before the court. In these circumstances, it cannot be said that the complainant dispatched Ex.P6 statutory notice to the accused on his wrong address.

In respect of service of statutory notice on the drawer of the cheque, our Hon'ble Supreme Court laid down the law in

CC.Alavi Haji Vs.Palapetti Muhammed and another 

reported in 2007 Crl.L.J. 3214, 

wherein it was held that --

“When the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of the notice in terms of Clause (b) of Proviso to Section 138 of the Negotiable Instrument Act stands complied with. When a notice is sent by registered post and it is returned with a postal endorsement 'refused' or 'not available in the house' - 'house locked' or 'shop closed' or 'addressee not in station' due service has to be presumed U/s.27 of the General Clauses Act.”

 ii) In another decision of our Hon'ble Supreme Court rendered in 

K. Bhaskaran  Vs.  Sankaran Vaidhyan Balan and another 

reported in 2000 (1) ALT (Crl.) 42 (SC), 

wherein it was held that:-

“ where sender of notice dispatched by post with correct address notice must be deemed to have been served on sendee unless he rebuts it. Notice returned as unclaimed is deemed to have been served on the drawer of the cheque in view of the presumption U/s.27 of the General Clauses Act.”

iii) Moreover, on this aspect, our Hon'ble High Court rendered a decision in 

Aparna Agencies, Hyderabad 

Vs. 

P.Sudhakar Rao & another reported in 1999(5) ALD 16

wherein it was held that --

 

“Notice of dishonour sent to the drawer of the cheque to his correct address by registered post. Registered notice returned with an endorsement 'addressee out of station' - 'door locked for 7 days'. Held the notice is deemed to have been served on the addressee in view of the presumption under Section 27 of the General Clauses Act”

iv) In another decision of our Hon'ble High Court rendered in Nirdosh Enterprises, Hyderabad Vs.State of A.P and another reported in 2004 (2) ALD (Crl.)298 (AP), 

wherein it was held that--

“ When once the notice has been sent to the accused to his correct address by registered post, the complainant is entitled to take the aid of Section 27 of the General Clauses Act and plead that notice sent to the accused is deemed to have been served on him. ”

      In the instant case, the accused merely claimed that the complainant dispatched statutory notice to him on his wrong address. But the accused did not furnish his correct address along with proof documents on the relevant period. On the other hand, the accused as DW1 in his evidence stated at one stage that he has not received any statutory notice from the complainant on his residential address or on his official address in another stage, he claimed that he has not stayed in the given address in Ex.P6 statutory notice, during the relevant period. This part of testimony made by DW1 clearly reveals that the address given in Ex.P6 statutory notice is not his wrong address, but he has not stayed in the said address during the relevant period. 

On this aspect, our Hon'ble High Court rendered a decision in 

N.Narsingarao Vs.Srinivasa Chary and another 

reported in 2010 (2) ALD (Crl.) 651 (A.P.) 

wherein it was held that--

“Notice sent not only by registered post, but also by courier service and under certificate of posting. Registered notice addressed to the accused returned with an endorsement “Addressee left and new address not known . Held that there is a valid compliance of said notice in issuing of notice by the complainant”

As per the material available on the record, it is not difficulty to say that the complainant dispatched Ex.P.6 statutory notice to the accused on his correct address and the postman visited the said address on 29.12.2008 and 30.12.2008 and later the postman concerned returned the registered post cover with an endorsement 'not served'. As per the aforesaid decision rendered by our Hon'ble Supreme Court, the mandatory requirement of issue of notice in terms of Clause (b) of Proviso to Section 138 of the Negotiable Instrument Act stands complied with, when the notice is sent to the drawer of the cheque on his correct address.

Therefore, it can be concluded that the complainant issued a constructive notice to the accused as required U/s.138 (b) of the Negotiable Instruments Act.